Remember what buying a car used to be like? Spending hours wandering around a dusty lot while a commission-hungry sales bro in coffee-stained Dockers yammers on about mileage, undercoating, and the sweet toaster oven he’s going to throw in with the deal after he “talks to his manager”? Hello online auto shopping; buh-bye bro.
Peer-to-peer (P2P) lending1 works in a similar fashion, bypassing traditional banks and credit unions just as online car sellers forgo the lot and those inexplicable blow-up wavy-arms dancers. With no bank in the way, investors work directly with borrowers in P2P lending, and transactions are conducted strictly over the internet. There are no free calendars or pens, but you also won’t have to deal with any of that awkward “human interaction” over a banker’s desk.
Just like buying a car online, peer-to-peer lending involves risk, so you should know what you’re getting into before going the P2P route for your small business. Take a ride with Business.org as we break down peer-to-peer lending.